29. Finance costs Group 2022 2021 R’m R’m Interest expense on borrowings 3 – Notional interest expense on lease liabilities 4 5 Total finance costs 7 5 30. Tax Group 2022 2021 Restated R’m R’m Current income tax 289 300 – Current year tax 290 299 – Prior years (over-provision) / under-provision (1) 1 Dividend withholding tax on deemed dividends 111 105 400 405 Deferred tax (297) 394 Total tax 103 799 Tax on the Group’s profit before tax differs from the theoretical amount that would arise using the tax rate applicable to South African/Namibian companies as follows: Profit before movement in policy liabilities (814) 4 624 Tax calculated at domestic tax rates applicable to profits in South Africa/Namibia (202) 1 324 Tax effect of income not subject to tax (1 476) (2 494) Tax effect of non-deductible expenses 1 664 1 900 Tax effect of tax rate on Dividend Withholding Tax on deemed dividends being different to tax rate on the individual policyholder fund (“IPF”) 111 53 Prior years under-provision / (over-provision) 4 1 Tax effect of CF tax rate being different to IPF tax rate 2 15 Total tax per Statement of Profit or Loss and Other Comprehensive Income 103 799 The applicable tax rate was 28% (2021: 28%) for South African companies and 32% (2021: 32%) for Professional Provident Society Insurance Company (Namibia) Limited. Professional Provident Society Insurance Company Limited has five separate tax funds: the individual policyholders’ fund (taxed at 30%), the Company policyholders’ fund (taxed at 28%), the untaxed policyholder's fund (not taxed), the risk-policy fund (taxed at 28%) and the corporate fund (taxed at 28%). The tax reconciliation is done on total tax on all funds. The Professional Provident Society Holdings Trust is taxed at 45%. Deferred tax is raised at 27% for the Corporate Fund. Dividend withholding tax is payable on dividends received in the individual policy fund. The Group has accumulated losses of R370.6 million (2021: R333.8 million) available in certain subsidiaries for offset against future taxable income in those subsidiaries. 157 Notes to the Consolidated Financial Statements
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